Analyst Ashok Kumar says Intel's communications business contributed to much of the shortfall. He says weakness in this segment is expected to have a disproportionate impact on Applied Micro Devices as it represents about 40% of the revenue mix for the company versus 7% for Intel. Kumar notes that the weak demand environment in the U.S. and Europe has impacted export-oriented Asian economies.
He cut his $0.93 2001 EPS estimate to $0.60, and cut the $31.6 billion revenue estimate to $26.1 billion. Kumar has zero visibility regarding the timing of recovery. Intel stock has support at historical trough valuation levels of about $26.